Current Legislative Activity:

July 2018

A ballot item has been proposed for the Michigan general election taking place on Nov. 6, 2018. the proposal seeks to increase minimum wage for
all workers including tipped employees and eliminate the tip credit for restaurant workers.

While the Michigan Brewers Guild supports a fair and higher wage for Michigan workers, we have to express deep concerns about the elimination of
the tip credit in the upcoming ballot proposal. This proposal initiative is driven by out-of-state interests which we do not believe are in
touch with the realities and needs of Michigan workers. We believe that despite claims from its supporters, the passing of this ballot initiative
will in fact negatively impact the thousands of tipped workers at hundreds of Michigan breweries.

MBG Position on Clean Water

July 2018

The Michigan Brewers Guild’s purpose is to promote and protect the craft beer industry in Michigan and a core part of our mission is to monitor
and assure a healthy brewing industry. A consistent and reliable supply of quality raw materials is fundamental to the success of our brewing
industry and water is the single largest raw material used by every brewery in the state.

Michigan breweries have a strategic advantage by operating in a region with an abundant supply of clean, fresh water and breweries rely on that
water to succeed now and in the future. Any disruption in the supply of clean water would be devastating to our thriving brewing industry and
it is critical that we preserve and protect this valuable natural resource. The Michigan Brewers Guild is opposed to any policy, industry or
infrastructure that threatens the security of the water supply in our state.

Michigan Bill Establishes New Craft Beverage Council

July 2018

PA 155 became law, which changes the name and make-up of the Michigan Grape & Wine Industry Council to the Michigan Craft Beverage Council.
Instead of being focused solely on wine and wine grapes, the group now has an expanded focus to include beer, hops, and malting barley as well
as other craft beverages. The new council is effective as of Oct. 1, 2018.

The day ended with "The Best Tasting Reception in Lansing" at the RE Olds Transportation Museum, catered by Palate and featuring beer from more
than a dozen member breweries.

Past Activity Archive:

Elimination of Keg Tags

February 2018

Public Act 166 of 2017 went into effect on February 11, 2018, repealing MCL 436.2030 which required a retailer licensee selling kegs to place
a keg tag on a keg sold to a customer, required the customer to sign a receipt, and required the retailer to retain a keg deposit. Retailer
licensees will no longer be required to order keg tags from the Commission's Executive Services Division and the Commission is no longer
required to make keg tags available to retailers.

Federal Excise Tax Reduction

December 2017

Efforts by the Michigan Brewers Guild in association with the Brewers Association and others were successful in bringing about a reduction
of Federal Excise Taxes on beer through the passing of the Craft Beverage Modernization and Tax Reform Act of 2017.

Under the bill, the federal excise tax that Michigan breweries will pay on beer will be reduced to $3.50/barrel (from $7/barrel) on the first
60,000 barrels produced annually, and reduced to $16/barrel (from $18/barrel) on production above 60,000 barrels. With so much growth in
our industry this will help Michigan brewers-who are manufacturers and entrepreneurs- to reinvest in their business, expand their operations
and hire more workers.

Rep. Hooker’s proposed tax hike falls flat with craft brewers

Representative Hooker recently introduced a bill that would terrible for Michigan’s breweries. The bill proposes to increase the excise tax
on beer by nearly 250% which would stifle growth in our industry. One common theme in our industry is that breweries and microbreweries
are challenged to keep up with growth and they need every available dollar to put back into expansion and the addition of employees. This
potential increase in taxation would be detrimental to Michigan’s breweries and the overall craft beer business including retailer, wholesalers
and consumers. The beer industry is already heavily taxed including both the federal excise tax and the state excise tax, in addition to
all other business taxes. Michigan’s tax on beer is the highest in the Great Lakes Region (higher than Indiana, Illinois, Ohio and Wisconsin)
and should be reduced, not raised. HB 5873 would be bad for Michigan craft beer and we urge our Representatives to oppose the bill.

Social Media Promotion Clarified

May 2016

Public Act number 106 of 2016 was signed into law May 3, 2016 with immediate effect. This law is important to Michigan Microbrewers and Brewers
because it allows for the use of unpaid social media promotion when promoting their brands. The Michigan Liquor Control Code and Administrative
Rules (R 436.1319) do not allow cooperative advertising between manufacturers (Microbrewers & Brewers) and retail licensees such as
restaurants, bars, grocery stores, party stores, etc. Prior to the passage of this law Microbrewers and Brewers were not allowed to mention
the name of a retail licensee in their advertising, which would include social media posts.

It is worth noting that the current rules which do not allow a beer manufacturers to purchase advertising and mention a retail licensee by
name do tend to level the playing field for small brewers and help them be more competitive in the marketplace. The problem is that when
the MLCC Code and this Rule were put into place there was no social media and now this was an unintended consequence which needed to be
corrected.

Public Act 106 allows Microbrewers and Brewers to use unpaid social media to advertise the following:

March 2014

A group of bills were signed into law that include important changes to the laws regulating the brewing industry in Michigan. The Michigan Brewers
Guild was actively involved throughout the process for more than a year, which ultimately lead to these changes. The package of bills all relate
to the Liquor Control Code and several amend regulations for breweries.

A summary of all of the bills included in the package follows with additional detail provided for key bills relating to breweries.

SB 504 – This bill revises some language in the liquor code to not say "liberally construed" but "construed to the effect and
intent"

SB 505 - This bill allows licensed retailers (bars, restaurants, etc.) to use certain items referred to as “barware” with brewery/brand
logos given certain conditions and restrictions. This has been referred to as a bill dealing with “Secondary Use” items. Logo glassware and
other items must be purchased by a retailer from an independent third party and cannot be supplied by the brewery or wholesaler.

SB 506 – This bill allows beer producers in Michigan to designate their wholesalers to pay the per barrel tax if they chose.

SB 507 – This bill allows wine makers to designate their wholesalers to pay the tax on the sale of their wine.

Must produce less than 1,000 barrels of beer per year (including tap room sales)

Cannot deliver to retailers located within a sales territory where sales rights have already been assigned to a wholesaler

Beer must be delivered by the Microbrewer in a vehicle owned by the Microbrewer Must comply with MLCC provisions relating to employees and
vehicles used to deliver beer, price schedules, etc. This means you have to follow any regulations that a wholesaler would.

HB 4709 – This bill changes the definition of Microbrewer by increasing the amount of beer that can be produced under that license
from 30,000 barrels to 60,000 barrels annually.

HB 4710 – This bill increases the number of Brewpubs that an individual can own from 3 to 6 and increases the quantity of beer
that can be produced by these brewpubs (combined) from 5,000 barrels to 18,000 barrels annually.

HB 4711 – This bill increases the number of locations where a licensed Brewer (produces more than 60,000 barrels) can sell its
beer for on-premise consumption from 1 to 2 locations. This bill also limits a Microbrewer that produces between 30,000 - 60,000 barrels to
selling beer for consumption on-premise at no more than 3 locations. The number of locations for Microbrewers under 30,000 barrels remains
unchanged (not limited).